Peak Oil Production soon in the U.S.

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Declining active rig counts in most oil & gas basins mean fewer job.

Even if current estimates of slowing and stopping growth in total U.S. oil production by the end of the year pan out, skilled talent will be needed for years to come to fill the high-demand jobs in the sector.

Yet, with an ageing workforce and fewer employees willing to join the industry, the problems are mounting for the shale patch.

U.S. crude oil production is set to decline from an all-time high of 13.5 million barrels per day (bpd) in the second quarter of 2025 to about 13.3 million bpd by the fourth quarter of 2026, due to decreasing active drilling rigs and declining oil prices, the U.S. Energy Information Administration said in its June Short-Term Energy Outlook (STEO).

With fewer active drilling rigs, the EIA now forecasts that U.S. operators will drill and complete fewer wells through 2026. On an annual basis, the administration expects total U.S. crude oil production to average a bit more than 13.4 million bpd in 2025 and a bit less than 13.4 million bpd in 2026.

Some big names in the industry also see peak shale output on the horizon.

“As you know that most of the shale basins now have either plateaued or starting to decline, except for the Permian,” Vicki Hollub, President and CEO of Occidental Petroleum, said on the Q1 earnings call.

“If companies continue to talk about dropping activity levels, I think the Permian could plateau sooner than we expected - and we had expected the Permian to continue growth through 2027,” Hollub added.

Ryan Lance, the chief executive of ConocoPhillips, said on the company’s earnings call that at $60 oil, “the folks that don't have the kind of cost of supply sitting in their portfolio are going to find themselves cash-strapped and returns-strapped.”

“Obviously, the balance sheets are in pretty good shape across the industry, better than we were in the last downturn, but you'll see a lot of activity cut back,” Lance added.

Peak shale output, whenever it occurs, does not mean a steep decline afterwards—it would rather be a long plateau of leveling off of U.S. crude oil production in which the slowdown in shale would be partly offset by rising output from the U.S. Gulf of Mexico, executives and analysts say.

U.S. oil production will not fall off a cliff, but the ever-shrinking pool of skilled employees in the industry could further challenge the shale patch with rising labor costs and drilling times.

By Tsvetana Paraskova for Oilprice.com